Alberta economy headed in 'right direction,' says ATB Financial
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NOV. 4, 2016
Stability, but not growth.
Good news, but not great.
That’s the word from ATB Financial, which on Wednesday released its latest outlook for Alberta’s economy.
As the oil sector goes, so goes Wild Rose Country, and ATB Financial believes that Alberta’s economy is still challenged as 2016 winds down.
“Our research suggests that the worst of the 2015-16 oil price downturn is now behind us,” says Todd Hirsch, ATB’s chief economist. “Oil prices should continue to grow modestly in 2017.
“That will bring stability to our province’s petroleum sector, but not growth,” he adds. “Hiring and resumption of investment will be weak in 2017.”
The ATB’s winter 2016-17 forecast predicts:
Alberta’s economy will contract by 2.6% in 2016, but grow by 2.1% in 2017;
Unemployment in Alberta will remain high, despite GDP growth; and
Retail and housing markets will remain relatively stable, but weak consumer and business sentiment are challenges.
“The projected growth in our GDP is a good sign, but 2017 will still be a tough year as many Albertans will continue to be out of work,” remarks Hirsch. “Things are going in the right direction but employment levels will take time to catch up to the rise in GDP.”
HAS CANADA’S OILSANDS SEEN THE WORST?
Out of the woods? Only time will tell.
Several of Canada’s oilsands giants reported their third-quarter financials in the past week—casting a hopeful eye toward 2017 as the energy industry makes a slow recovery.
Among the results:
Husky posted a $1.4-billion profit in Q3, due in large part to the sale of midstream assets;
Suncor reported net earnings of $392 million, thanks to strong upstream production; and
Cenovus reported a $251-million net loss for Q3, with the company having cut costs by $500 million this year.
“They’d like to hope that they’ve seen the worst,” industry analyst Fai Lee, of Odlum Brown Ltd., tells the Calgary Herald. “It’s still a $50 environment — and it’s still very challenging.”
WINDOW CLOSING ON M&AS, SAYS SUNCOR
At least one prominent oilsands player says the wheeling-and-dealing days are over.
With oil in the neighborhood of $50 a barrel—nearly double the rock-bottom prices of last February—Suncor president and CEO Steve Williams says the urgency for some companies to sell assets has abated.
“There is beginning to be less pressure on sellers and the window of opportunity may well be closing,” Williams told reporters and analysts during an earnings call last week. “We will not chase deals and, to be very frank, we don’t need to do any more mergers and acquisitions.”